I am by no means pro-regulation but companies like Wells Fargo with inadequate controls and sub-par leadership (this asset cap has been going on more than 7 years, whether it's an inability to fix things by CS or predecessors or both) needs a dividend restriction or special covenant signed with the regulatory authorities. The latest outrageous 30 billion stock buyback is a quintessential example of how management puts their interests first ahead of the company and its staffs. Wells has been quiet firing (why the sheer number of headcount reduction since CS and his cronies came on board) staffs at a large scale, and its beyond me why the media hasn't been really mentioning about this. Although they don't directly mention it, WSJ has a pretty good recent article out there that Wells is facing a make or break moment and doing a very poor job on addressing the known regulatory issues and emerging issues.
The question is, why would the regulatory authorities allow Wells to pay dividends in this cr-ppy situation we are in, and when the bank is laying off people and outsourcing jobs left and right to the detriment of the long term viability of the bank? I'd say crony capitalism.
Wells should not be allowed to pay any dividends or do buybacks until its regulatory issues are fixed and it stops firing people outside of common sense, business reasons (currently it's just extreme expense control mode to cope with stagnant revenues from asset cap and an inability to deploy capital efficiently and transferring one expense category to another and, most importantly, for higher the so-called leadership bonuses. Disgusting.)